N.Y. Reaches Deal on Public Authority Reform

New York lawmakers reached a compromise on public authority reform, Gov. David Paterson announced yesterday evening at a press conference in Albany flanked by the Democratic Legislative leadership.

A bill to create the Public Authorities Reform Act of 2009 will establish a new, independent Authorities Budget Office with far-reaching oversight powers.

The Legislature passed sweeping changes to how authorities operate earlier this year but the legislation stalled after Paterson and others objected to certain provisions. The modified bill, A. 40012, was introduced yesterday in extraordinary session with the support of the Democratic majority leadership in both chambers of the Legislature where passage is all but assured.

The new ABO will replace an existing oversight office and be run within the Department of State by an executive director appointed to a four year term, subject to Senate confirmation. The office will have subpoena power and will review the potential consolidation of authorities and collect financial information from them.

One major sticking point was a requirement in the original bill that government property be sold at fair-market value. Critics said that this provision could hinder economic development initiatives that rely on transactions at less than fair-market value as part of incentive packages. The compromise allows property to be sold at below-market value if the sale is within the mission of the authority as defined by its authorizing statute and the transaction is disclosed. 

The act will also require board members to have an explicit fiduciary duty to the authority rather than the person or the entity that appointed them. It also provides for the state comptroller to review no bid contracts.

Assemblyman Richard Brodsky, D-Westchester, who chairs the Committee on Corporations, Authorities, and Commissions, has pushed for public authority reform for years. 

“These are Soviet-style bureaucracies,” Brodsky said of public authorities in general. “They will not be a week from now.”

Assembly Speaker Sheldon Silver, D-Manhattan said the act would “shed much needed light on our so-called 'shadow government.’ ”

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